Pay and benefits of top business executives rose by 27% last year to an average of £4m each, despite a backlash against big basic salaries and bonuses, according to research.

Income Data Services found that while basic pay rose slightly and standard bonuses fell noticeably, total executive packages have been bolstered by a big increase in long term incentive plans (LTIPs), share awards based on a company’s performance over several years.

The study of the biggest FTSE 100 companies shows LTIPs have risen more than 80% across the board in the past year, and in the most recent figures for 2011-12 accounted for more than half of chief executives’ total remuneration.

The slowdown in basic pay and bonuses will be welcomed by campaigners pushing for tough action on executive pay amid concerns about run-away salary costs, especially when companies perform badly.

LTIPs can be fairer as they reward directors for achieving long term goals, not pursuing short term profits at the expense of future business.

There are still concerns that some schemes allow big payouts to executives at loss-making businesses.

“Many LTIPs are based on comparative performance with competitors, rather than their own company’s historical performance, meaning that directors stand to earn a payment even if their company’s performance has worsened – as long as their chosen peer group has done even worse,” said Steve Tatton, editor of the IDS report.

Another feature of the renewed focus on long-term performance is big handouts of shares, many of them awarded in 2008 and 2009, since when the stockmarket has risen more than 60%.

“When share prices have subsequently risen, as they have since the depth of the recession, directors have had the potential to profit from ‘windfall’ LTP gains,” said Tatton. “Shareholders will not take issue with directors’ earnings increasing, provided they are doing so in line with company performance and share price.”

Critics seized on continuing rises in total remuneration when the economy has been in recession. The IDS report says the median increase in FTSE 100 chief executives’ packages was 10% to £3.2m each.

Deborah Hargreaves, former chairman of the independent High Pay Commission’s report into executive pay and now director of the High Pay Centre thinktank, said: “At a time of biting austerity for the economy, those at the top of our biggest companies are seeing their pay continue to increase sharply compared to everybody else.

“The balance of executive pay may have shifted from annual bonuses to complex incentive plans, but the effect remains the same. Performance-related pay still encourages excessive risk-taking for short term rewards. Shareholders have tried to rein in some of the worst excesses this year, but this has only been partially successful.”

The figures for executive pay come as the One Society thinktank publishes a report arguing that despite promises to voters by the three big parties at the last general election the gap between the best- and worst-paid workers has widened, and will increase further as a result of existing government policies.

The contrast was seized on by Unite, the biggest trade union. “While millions of working people are either without work, or having their pay frozen or slashed, Britain’s boardrooms are finding even more devious ways to squeeze even more cash from their companies,” said the general secretary, Len McCluskey.

The slowdown in basic pay, up by a median of 3.5%, and reduction in bonuses by a median 4.9%, could be attributed to a number of factors, said Tatton.

“Whether as a reaction to Government pressure, shareholder concerns or a worse than expected business environment, it seems the brakes have been applied to the basic pay growth for FTSE-100 bosses,” he added.